Federal Tax News

A new law is providing more COVID-19 relief. On June 5, President Trump signed the Paycheck Protection Program (PPP) Flexibility Act of 2020, which provides more flexibility for participants in the loan program. The law includes provisions that allow participants to defer the payment of certain payroll taxes that the CARES Act prevented them from deferring. Highlights of the bill include allowing businesses 24 weeks instead of eight weeks to use the loan money; modifying the restrictions limiting non-payroll expenses from 25% to 40% of loan proceeds; requiring loan recipients to comply with COVID-19 safety standards; and eliminating restrictions that limit loan terms to two years.

The PPP is designed to help small businesses sustain operations and keep workers employed during the COVID-19 pandemic. The program, which kicked off on April 3, provides loans that are forgivable if certain requirements are met.

Some Economic Impact Payments (EIPs) are being sent on prepaid debit cards. These EIP cards were sent in plain envelopes from "Money Network Cardholder Services." Some recipients thought the envelopes were junk mail and they threw them in the trash. The IRS now explains that individuals who have lost or destroyed their cards may request free replacements through MetaBank® Customer Service. The $7.50 standard fee will be waived for the first reissuance of an EIP Card. Any initial reissuance fee charged to a customer earlier will be reversed. Individuals don't need to know their card numbers to request replacements. You can request a replacement by calling 800-240-8100 (option 2 from main menu).

EIPs are being sent by the federal government to help ease the financial impact of the novel coronavirus (COVID-19) pandemic.

How has the COVID-19 pandemic affected the U.S. federal budget? Estimates of the effects were outlined in a recent letter from the Congressional Budget Office (CBO) to Sen. Rick Scott (R-FL), a member of the Senate Budget Committee. Some of the deferred revenue "will be collected in July, some will be collected in later years, and some will be permanently lost," CBO said. The delays are estimated to reduce tax revenue by $200 billion in 2020, though in the long-term the loss may be $12 billion. Absent "significant additional emergency funding" the CBO projects the fiscal year 2020 federal deficit will be $3.7 trillion and $2.1 trillion for FY 2021. Here's the letter: https://bit.ly/37kosoc

Did you receive an Economic Impact Payment (EIP) that you believe was for the wrong amount? EIPs are the payments being issued to eligible taxpayers to help mitigate the financial effects of the novel coronavirus (COVID-19). The amount that eligible taxpayers can expect is based on income, filing state and family size. If your check wasn't for the amount you expected, the IRS wants you to know it isn't able to correct payments or issue additional amounts at this time. If you're eligible for more than you received, you can claim the extra amount on your 2020 tax return (to be filed in 2021). The IRS will provide further details in the future. You can calculate eligibility here: https://bit.ly/3gaKn58

The Taxpayer Advocate Service (TAS) routinely helps address taxpayer issues. But in a recent memorandum, it announced it won't accept cases that are solely related to EIPs. Many taxpayers who haven't received their payments have reached out to the TAS for help, but the TAS doesn't have mechanisms in place to expedite or improve EIP processing. However, the TAS can help taxpayers deal with issues, such as identity theft and filing of duplicate tax returns, which may stop or delay a taxpayer's original refund and the EIP. Contact us with questions.

Categories: July 2020, Monthly Bulletins
Tags:

Want to be notified of new articles like this? Sign-up Now!

  • This field is for validation purposes and should be left unchanged.
Partner with dedicated, expert accounting advisors.
Request A Free Consultation

More HK News

close

Search HK

This Site Uses Cookies to Improve Your Experience

The use of cookies is required to deliver certain portions of our website, such as 3rd party educational resources and content. We also use cookies to track your basic website usage, which enables us to improve how our website meets your needs. If you decline, some areas of our site may be unavailable. Read our privacy policy for complete details.

Read Our Privacy Policy Agree To Cookies Deny Cookies